THE Fianna Fail leader, Mr Bertie Ahern, has said a government led by his party would ensure Ireland joined monetary union from day one. Speaking at the launch of a party document on EMU, he said he believed doubts surrounding monetary union resulting from events in France and Germany would blow over.
Responding to his statement, a spokesman for the Progressive Democrats said they also wanted to see Ireland joining on day one, but the interests of businesses exposed to sterling must also be considered.
While Mr Ahern is confident of the project proceeding on schedule, senior Fianna Fail party figure, Mr Ray MacSharry, said he believed the move to monetary union should be delayed for a year if the alternative was going ahead with a weak currency.
A former EU Commissioner and Minister for Finance Mr MacSharry said the criteria to meet the single currency set down in the Maastricht Treaty must not be diluted. He was speaking as speculation grew on the markets that a liberal interpretation of the Maastricht rules might allow a large initial membership group and a weak euro.
He stressed that the euro must be "credible and acceptable" on world markets. "It would be better if it was delayed for a year rather than start weak. The UK might also be ready to join at that stage he noted, which would be helpful to Ireland. Mr MacSharry an adviser to Mr Ahern during the campaign, also warned that if the entry standards were loosened the currency would be weaker and interest rates would be higher.
Mr Ahern, questioned on Mr MacSharry's views, did not disagree, but said he believed there would be a "critical mass" of enough states which meet the criteria and this, along with the commitment of Europe's leaders, would ensure the project could proceed on time.
In their manifesto, Fianna Fail's potential partners, the Progressive Democrats, said Ireland should take a wait-and-see approach on EMU. The document said "options must be kept open in relation to membership of EMU".
The party has since said that on balance it believes Ireland should join from the start but must ensure the entry terms are favourable and that the interests of business are considered.
According to Mr Ahern, staying out of monetary union would suggest Ireland was still an economic satellite of Britain. In any case, he said it was still the right policy to move towards budget balance so as to reduce debt and heavy interest payments. He said Ireland could meet the criteria after a decade of careful budgeting and other countries should be expected to get themselves in order.
Commenting on the project's troubles in Europe, Mr Ahern said the gold stocks in Germany were undervalued and the French Socialist Party was committed to monetary union. "I believe that particular storm will blow over," he added. He also said a firm limit on public spending was more likely to make a success of monetary union or to prepare Ireland if the project were to be threatened for any reason.
Mr MacSharry agreed that public spending could not continue at current levels. We need a cushion," he said. Domestic policy is the key to our survival in EMU, in particular, sensible government expenditure levels and low tax rates. With the present Government's attitude to spending, I doubt we would survive long."
Mr Ahern also said the next social partnership would have to take full account of the possible effects of monetary union, particularly in the absence of British membership. While Fianna Fail agreed the concerns of exporters and others who would be most affected must be looked at, it was unlikely there would agreement on laying down hard and fast rules in advance for "essentially hypothetical situations.
Mr Charlie McCreevy, the Fianna Fail finance spokesman, also warned that substantial transfers could not be expected. In a swipe at the Dublin-negotiated Stability and Growth Pact, he said maintaining individual member-states' balanced budgets was "wholly unreal as a logical objective".